ICBC Now Insolvent: Is a Taxpayer Bail-out Imminent?

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February 10, 2019

ICBC's third-quarter report showed an operating loss of $890 million and liabilities exceeding assests by $119 million. ICBC is now insolvent. The question is whether the coverage changes will produce sufficient savings to stablize ICBC's finances?

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January 25, 2019

Regulator Failed to Warn of ICBC's Financial Crisis.

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January 17, 2019

The BC Utilities Commission's process for reviewing ICBC's Basic rate requests is not designed to link to the fical year, not to multi-year forecasts. This should be reformed to provide an early warning system for the future.

B.C. Hydro's Q2 Results: Volume of Power Sold Falls While Debt Climbs

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December 6, 2018

Government Requires Money-Losing ICBC to Fund More Traffic Enforcement

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November 30, 2018

The government has directed ICBC to fund more traffic enforcement, but its more of a restoration. And why is the government not funding more police traffic enforcement instead of asking over-burdened policyholders to do it?

Government Q2 Forecast Understates Cash Surplus

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November 27, 2018

ICBC's Q2 Results: More Red Ink and Even Less Transparency

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November 25, 2018

On Friday the government released ICBC's second quarter excuse for a quarterly report, and a unsubstantiated forecast of a $890 million loss for the current fiscal year. Occasional Paper 64 reviews the numbers and suggests that the year-end forecast may be optomistic.

New Fraser Institute Paper on ICBC.

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November 16, 2018

Ontario Seeks to Improve Financial Transparency and Accountability.

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November 11, 2018

A committee of the Ontario legislature is holding hearings into how the previous Liberal government attempted to ignore the accounting rules to make the government books appear than was the case. What lessons might the B.C. government learn from this review?

Terminology and Perceptions of ICBC.

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November 1, 2018

Driver-based penalties are increasing by 20% today, with another 20% increase planned for 2019. ICBC calls the penalty a premium, which confuses this penalty with the vehicle premium. Confusion is part of the reason for the low public perception of our auto insurer.

Unknown Driver Fee a Symptom of Larger Problem.

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October 15, 2018

Rate-Regulated Accounting at B.C. Hydro: A Primer.

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October 2, 2018

The attached paper provides background for two reports on deferral accounts and B.C. Hydro's finances that are expected to be released shortly. The government has promised to fix the finances at our public utilitity, but the details on how this will be accomplished is unclear.

Senior Officials Review of BC Hydro Rate Options: Will New or Old Thinking Prevail?

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September 23, 2018

This paper explores the options available to the senior official committee appointed to develop recommendations for a new rates plan for B.C. Hydro. Will the committee adopt the new approach of restoring integrity to financial management, or continue with the old practice of abusing the deferral accounts?

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September 21, 2018

The Ontario government has moved to clean-up certain accounting practices, including the financing of the "Fiar Hydro" deferrals. The accounting adjustment of the electricity deferrals increased 2018/19 expenditures by $2,4 billion.

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September 4, 2018

This paper discusses the fact that the NDP government is using cabinet orders to control ICBC's finances and keep the B.C. Utilities Commission confined. These were the tactics used by the previous government to avoid public oversight.

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August 31, 2018

This paper provides an overview of why the government set aside $950 million for the 2017/18 fiscal year to begin to fix the financial troubles at B.C. Hydro. the restoration of proper accounting standards at the public power utility presents certain financial problems for the government.

ICBC Suffers Worst Ever Financial Year. August 28, 2018.

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August 29, 2018

The just released 2017/18 annual report shows a combined Basic and Optional operating loss of $1.3 billion, and the capital reserves are now dangerously below the safety margins. Occasional Paper No. 60 reviews some of the key incicators.

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July 18, 2018

This paper reviews the positive 2017/18 annual reports of the public auto insurers in Saskatchewan and Manitoba for both the compulsory Basic and the optional programs. This contrasts with ICBC's forecasted combined loss of $1.4 billion.

Why Does the Government Condone Poor Public Accountability at ICBC? June 25, 2018.

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June 25, 2018

This paper examins ICBC's main accountability reports in light of the accountability model adopted by government in the early 2000's. The level of public accountability is poor, and the government should require ICBC to make significant improvements.

Public Pension Plan Solvency: Why Is BC Hydro an Outlier?

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May 10, 2018

Commentary on Matthew McClearn Article on Hydro Accounting in Ontario. April 22, 2018.

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April 23, 2018

McClearn's article in the Globe and Mail provides a useful summary of many of the issues involved in the accounting dispute between the ontario auditor general and the government. Similar issues exist in British Columbia.

Should the Government Return the $1.2 Billion Appropriated from ICBC Poilcyholders? April 20, 2018.

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April 21, 2018

Between 2010 and 2015 the provincial government appropriated almost $1.2 billion of Optional policyholders' capital. Now -- with the province's finances healthy and the ICBC capital reserves almost eliminated -- would seem an appropriat time to return the funds. Occasional Paper No. 56 estimates the Basic and Optional capital shortfalls to 2021/22.

Fraser Institute Report on ICBC's Finances: Late and Confusing. April 11, 2018.

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April 12, 2018

Subsidizing Seniors: ICBC and BC Ferries. April 9, 2018.

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April 9, 2018

The recent announcement of an increase in the fare subsidy for seniors on the BC Ferries prompted me to review an earlier estimate on the cost of the 25% seniors' subsidy at ICBC's Basic insurance. If the government funded the sudsidy it would relieve some of the pressure on Basic rates.

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April 1, 2018

This 'Commentary' paper reviews the Ontario and BC public accounts committee discussion of the oppositin by the two auditors general of the application of reguatory accounting, and the impact to the governments' financial statements.

ICBC's Three-Year Forecast Raises Many Questions. February 27, 2018.

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February 28, 2018

ICBC's 2017/18 to 2020/21 financial forecast shows the combined capital reserve falling to dangerously low levels. However many inconsistencies make the forecast suspect. Also included is Acting CEO Nicolas Jimenez's email of March 15th, my reply of March 19th and his reply of March 28th.

Posted
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February 17, 2018

The national public sector accounting rules require that ICBC's net income or loss be counted in the government's revenue. The increase in the net loss reduces revenue, but there is no change in the actual cash being transferred (which is nil). This accounting anomoly requires further review.

Comment: Changes Coming to ICBC's Injury Model. February 8, 2018.

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February 13, 2018

On 6 February 2018, minister responsible David Eby announced major changes to injury claims process and coverage, with expanded no-fault accident benefits and monetary limits, and a $5,500 cap on pain and suffering claims for "minor" injuries. The government expects that these changes will reduce annual claims costs by approximately $1.0 billion.

ICBC's Second Quarter Report: More Bad News and Less Information. December 29. 2017.

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December 28, 2017

ICBC recently posted its second quarter 'Statement of Operations,' which is highly deficient as a quarterly report from such an important Crown corporation. Occasiona Paer No. 50 compares the results with Saskatchewan's compulsory insurance program in an attempt to understand the reasons for the continuing losses.

ICBC's Capital Reserve Minimums Are Too High. December 21, 2017.

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December 21, 2017

The government should lower the minimum capital targets to reduce the current and forecasted capital deficiency, Given the nature of the Basic monopoly, and the near monopoly enjoyed by the Optional program, the targets should be lower, thereby reducing the pressure on future rates.

Alberta Caps Auto Insurance Increase at 5 Percent. December 19, 2017.

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December 19, 2017

The Alberta government has limited the 2017/18 increase in the private vehicle insurance rates to 5%. It stated that the previously allowed 10% maximum increase was not inline with its affordability priority. Background and implications are provided.

ICBC's Financial Crisis: How Did It Happen? December 17, 2017.

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December 17, 2017

This paper provides a high-level review of how ICBC's costs out-stripped revenues from 2012 to 2016/17, and focusses in bodily injury claims costs.

The paper suggests that capping pain and suffering claims for minor soft tissue injury claims will not generate sufficient savings to treturn ICBC's finances and capital reerves to a satidfactory condition.

Posted
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December 8, 2017

The Manitoba regulator recently approved a 2.6% increase in Basic vehicle rates for the coming year. This paper looks at how BC rate increases compare to the publicly-owned no-fault systems in Saskatchewan and Manitoba.

Fixing ICBC's Finances: Four Changes the Government Should Make. December 4, 2017.

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December 4, 2017

The government is planning changes to ICBC's insurance model to reduce costs. Occasional Paper No. 47 discusses areas where the government should re-imburse ICBC policyholders for current programs or policies that benefit the taxpayer.

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November 29, 2017

Have the NDP Succumbed to the Siren's Call of Deferral Accounting? November 27, 2017.

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November 27, 2017

The current government's plan to freeze BC Hydro rates is the latest example of how governments have succumbed to the alure of short-term gain by manipulating BC Hydro's finances. Occasional Paper No. 46 traces the key events since 2011.

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October 26, 2017

The Auditor General has added a new reason to qualify her opinion of the government's 2016/17 financial statements; the fact that the 'prescribed' accounting standards do not conform to the public sector accounting standards. Read more in Occasional Paper No. 44.

What Would Ontario's Auditor General Make Of BC Hydro's 'Prescribed' Accounting Standard? October 22, 2017.

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October 22, 2017

In a special report the Ontario Auditor General severely criticised that government's new regulatory deferal scheme; what would she make of the accounting practiced at BC Hydro to surpress the true cost of electricity?

Capital Destuction at ICBC Continues September 29, 2017.

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September 27, 2017

ICBC's forecast for 2017/18 shows a continuation in th loss of capital. Occasional Paer No. 41 traces the loss by program from 2010 to 2017/18, and confirms the structural deficit of approximately $400 million per year in the Basic program.

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September 8, 2017

Comparing auto insurance prices across provincial jurisdictions is a difficlut task. Occasional Paper No.40 shows that the methodology used by Mike Milke in a recent Canadian Taxpayer Federation report is flawed.

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September 1, 2017

Further Questions About the Ernst Young Report on ICBC. August 20, 2017.

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August 20, 2017

A more detailed review of the Ernst Young report raises serious concerns about the costing methodology, and the savings that might be achieved by capping pain and suffering awards on minor injury claims. The are discussed in Occasional Paper No.38.

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August 6, 2017

This paper reviews the Ernst Young report's options to increase the affordability of auto insurance. It questions some of the proposed cost savings and recoomends the adoption of Saskatchewan's dual Basic model.

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July 5, 2017

Options for Financing Site C. June 24, 2017

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June 24, 2017

What impact will the Site C project, whether it proceeds or is cancelled, have on BC Hydro's operating budget, and what are the options to pay for it? Occasional Paper No. 33 provides a high-level look at these questions.